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Finance

De Beers, Botswana finalise talks on diamonds deal

Published by Global Banking and Finance Review

Posted on February 3, 2025

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CAPE TOWN (Reuters) -De Beers has finalised talks on a rough diamond sales deal with the Botswana government and on extending mining licences for its joint venture there to 2054, the Anglo American unit said on Monday.

"The signing will be in the next few weeks...the government of Botswana will be hosting the signing," De Beers CEO Al Cook told Reuters in an interview.

Debswana, a 50:50 joint venture between top diamond producer Botswana and De Beers, currently sells 75% of its output to De Beers.

In 2023, the two sides agreed to a 10-year deal under which the government's share of production would gradually rise to 50%.

However, the deal was never signed under the leadership of former Botswana President Mokgweetsi Masisi.

On Jan. 23, new President Duma Boko, who swept to power last October, said he hoped to quickly finalise the agreement.

The conclusion of the negotiations is in alignment with those agreed in 2023, De Beers said in a statement.

Negotiations on the matter began in 2018.

Boko has said talks aimed at increasing Botswana's ownership stake in De Beers - currently at 15% - were "going well".

DIVESTITURE

Anglo American is seeking to divest De Beers as part of a broader restructuring plan aimed at refocusing its operations on copper and iron ore mining.

A public listing or sale to a sovereign wealth fund or other strategic investor are two possible options, sources have said.

Yet the spin-off plan for the 137-year-old diamond producer comes at a time of depressed diamond prices.

Rough diamond prices have slumped by around 20% since early 2023, according to the Zimnisky Global Rough Diamond Price Index, hurt by the rising popularity of lab grown diamonds and a shift by younger consumers away from diamonds.

But Cook is confident the deal with Botswana will help boost their marketing efforts.

"For the country of Botswana, we can open up a new marketing direction, which is to tell the origin story of the diamond," he said.

(Reporting by Clara Denina, Felix Njini in Cape Town, Chandini Monnappa and Aby Jose in Bengaluru and Nelson Banya in Harare; editing by Mrigank Dhaniwala, Sherry Jacob-Phillips and Jason Neely)